Happy New Year 2021

 2 Jan 2021

Dear Fellow Investor,   

Happy New Year and it looks like 2021 will be happier than 2020. Vaccines are being rolled out across the world and within a few months economies will bounce back. Stay at home and travel restrictions will be lifted. Consumers will be spending.  Singapore has already started the vaccine rollout. Japan by March intends to vaccinate the whole country  in time for the Tokyo Olympics which is scheduled for 23 July.  Malaysia plans to rollout in February as it was announced on CNA today that we would get our first batch of the Pfizer vaccine by February.  

Economic stimulus and low interest rates will also boost GDP and economic recovery.   Japan has launched the biggest stimulus on record which  has launched a big rise in the Nikkei. Our positions in Nidec, the maker of micro motors, robotics and factory automation systems are benefitting.  Our EWH, the Hong Kong blue chip ETF is also doing well as it is a play on China. China is back to normal as their Covid problem is mostly solved. They  are in progress rolling out a nationwide vaccination drive. Our position in SATS Singapore has risen substantially from the March lows.  

Being an airline caterer they were effected by the drop in airline traffic but as they have a strong logistics arm and exposure to China they are recovering.  They have the cold chains in place to deliver the Pfizer vaccine which needs  minus 70 degrees C to survive. The competitive advantage of SATS is their innovation with regards to AI, robotics, and big data. They also have since their founding in 1972 shown consistent increasing returns on invested capital, Warren Buffet’s favourite indicator.

Doing a sector analysis of the KLSE, the technology index has the best looking chart. It moves from high to high. Consumer products are also performing.  This is in spite of pervading pessimism and bad news for example  the rail project cancellation between Singapore and Kuala Lumpur and the US sanctions placed on Felda and Sime Darby  on their palm oil exports.   Our positions in Kim Loong and United Plantations were not effected.  We hold no construction shares so this rail project news should not effect us.

Happy New Year and take care,

Bill

I would like to recommend a movie now playing on Astro,
Call of the Wild which is a story of greed for gold and a faithful dog named Buck